NEW YORK A U.S. federal judge on Thursday heard a diverse parade of objectors seeking to derail a record $7.2 billion class action settlement he is weighing between merchants and credit companies Visa Inc and MasterCard Inc over credit card fees.

U.S. District Judge John Gleeson of Brooklyn reserved final judgment at the conclusion of a roughly 5 1/2-hour hearing, saying he had been presented with "very important and difficult issues." His decision could take several months to deliver.

Were Gleeson to approve the deal, it would be the largest federal antitrust settlement in history.

Merchants first sued Visa and MasterCard in 2005, accusing the two companies of fixing the fees charged to merchants each time their customers used their credit or debit cards. They were accused also of preventing merchants from steering customers to cheaper forms of payments and other anti-competitive behavior.

Visa and MasterCard have denied the allegations.

Gleeson gave preliminary approval to the settlement in November 2012. But the deal has been opposed by thousands of objectors.

In a packed courtroom, Gleeson heard complaints about the deal from more than a dozen representatives of the objectors, including retailers Wal-Mart Stores Inc and Target Corp, the states of Ohio and California, consumer groups and owners of a gas station in Minneapolis.

They revived concerns about a litigation release in the settlement that benefits Visa and MasterCard. The release forces merchants who accepted Visa or MasterCard as of last November or will do so at any time in the future to give up their right to sue the credit card companies over certain rules or similar ones indefinitely.

Stephen Neuwirth of Quinn Emanuel Urquhart & Sullivan, an attorney representing Home Depot Inc, told Gleeson that the provision violated the Due Process Clause of the Fifth Amendment of the U.S. Constitution. Neuwirth argued that Home Depot and other merchants that object to the deal should be able to "decide for themselves whether to tie their fate with the class representatives or go it alone."

With the broad litigation release, Neuwirth argued that Visa and MasterCard would be forever protected from lawsuits involving any of the rules they require merchants to follow.

Kenneth Gallo of Paul, Weiss, Rifkind, Wharton & Garrison, an attorney for MasterCard, countered that rules not predicated on the same facts as the existing rules would not be covered by the release.

JUDGE HAS CONCERNS

But the judge said he had concerns that the release may cover territory that could not be foreseen. At one point, he asked the lead counsel for the class plaintiffs, Craig Wildfang of Robins, Kaplan, Miller & Ciresi, whether he viewed the release the same way as the defendants.

"We're close," Wildfang said.

Wildfang conceded that he wished the release had "fewer words," but he said it was the result of a necessary compromise.

Objectors to the settlement also complained that the changes Visa and MasterCard were required to make as a result of the settlement would not benefit them.

The settlement allows merchants to surcharge customers who use Visa and MasterCard in certain situations to try to drive price competition from the credit card providers. But lawyers for the objectors noted that more than 10 states prohibited surcharging.

Jeffrey Shinder of Constantine Cannon, an attorney for several objectors including Amazon.com Inc, said that to certify a mandatory injunctive relief class in which some merchants would not benefit violated holdings made by the U.S. Supreme Court in a case known as Wal-Mart v. Dukes.

During the hearing, Gleeson asked for changes that could be made to the settlement that would entice some objectors to participate in the settlement.

But at one point, while hearing objections made by a representative from 7-Eleven Inc, he voiced frustration. He said some objectors appeared to be seeking more than what they could expect to obtain than if they won at a trial.

"To get relief, you've got to win," he said. "A settlement reflects the uncertainty about the ability to win."

Visa and Mastercard have said they are confident the deal will receive Gleeson's support.

The case is In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, U.S. District Court for the Eastern District of New York, No. 05-1720.

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